Property prices in China rose at an annual rate of 7.8 percent in December compared to 5.7 percent in November. This is the fastest rate of growth in 18 months, adding further to fears that a housing bubble-fueled state of inflation is inevitable.
Fitch Ratings addressed this concern in a recent evaluation of China’s economy:
“Fitch is concerned about an eventual deterioration in banks’ asset quality, amid the loan growth acceleration in 2009. High investment spending, particularly in the real-estate sector, also carries the risk of asset price misalignments.